Canadian Securities Course (CSC) Level 2 Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

A growth-oriented asset class is characterized by high risk and volatility. This stems from the nature of growth investments, which are typically stocks or assets that are expected to grow at an above-average rate compared to their industry or the overall market. Investors are often looking for significant capital appreciation, which can lead to price fluctuations and increased volatility.

Growth-oriented assets may not provide immediate returns in the form of dividends; instead, they rely on the appreciation of value over time. This potential for high returns comes with greater risk, as not all growth investments will perform as expected. Therefore, risk and volatility are inherent characteristics of a growth-oriented asset class, making it suitable for those who are willing to take on more risk in pursuit of higher rewards.

The other attributes do not align with the behavior generally associated with growth-oriented assets. For example, a decreased price-to-earnings ratio typically suggests a lack of growth potential rather than an asset focused on growth. A stable dividend payout suggests a more conservative income-focused investment, while an increased dividend yield usually points to stability and lower growth expectations, rather than the potential for high growth and volatility.